Tuesday, January 25, 2022

Hutchinson O2 takeover in the hands of European officials

The future of Hutchinson‘s takeover of mobile operator O2 is in the hands of Brussels officials after the company made its last plea to competition watchdogs.

Hutchinson aims to combine Three and O2 which it acquired for £10.25bn from Telefonica last year, resulting in Britain‘s largest mobile operator.

Ofcom, the UKs telecoms regulator has suggested that in order to protect consumers from increasing costs, four network owners are required. Officials in Europe who have the option to prevent the deal from going forward have suggested that Hutchinson sells a number of its airwaves and mobile masts to allow a new company to enter the market.

Executives claim that this move is crucial to enable Hutchinson to compete with bigger rivals BT and Vodafone. However they remain unsure of the outcome as Hutchinson has not yet revealed a deal to offload some of its assets.

European representatives have until 15 May to confirm whether they will allow or prevent Hutchinson‘s O2 takeover.

Hutchinson had discussions with Virgin Media about a possible sale, however, its appeal depends on the selling of long-term rights on its network at “a reasonable rate of return”.

It is understood that Sky has invested £2bn for a 20% share for over 10 years if the O2 takeover goes ahead. Virgin Media may also take 10% if the mobile merger is finalised.

The mobile conglomerate is also in talks to offload O2‘s 50% stake in Tesco Mobile back to the grocer.

 Hutchison, Sky and Virgin Media declined to comment.



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